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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (30555)	4/14/2005 10:17:45 AM
From: Haim R. Branisteanu	Respond to of 110194

That is all right and I agree with those points the problem is that the USD shorts are "weak hands" Dollar Rallies, Continuing Recent Upward Trend Dow Jones Newswires NEW YORK -- The dollar rallied in New York Thursday, reaching a two-month high against the euro, after moving up steadily in the overnight session in a follow through to recent dollar strength. In morning trading, the euro was at $1.2784, down from $1.2906 late Wednesday in New York. The dollar was at 108.29 yen, up from 107.39 and at 1.2168 Swiss francs, up from 1.2004. The pound fell to $1.8790 from $1.8932. The dollar's rally comes with little significant news, and continues to be somewhat confusing to many market participants, who have seen the U.S. currency rally in the face of a record February trade deficit and disappointing March retail sales. Since January, the dollar has traded in a range, supported by the solid U.S. economy but pressured by growing U.S. external deficits. Lately, however, the market seems to be keeping its focus off the deficits and on growth fundamentals for the U.S. economy, particularly in relation to ailing Europe and Japan. That has helped the dollar stay in the upper reaches of the range where it has traded since early January, though the euro has yet to test its February low of $1.2733. Economic data in the U.S. Thursday did little to extend the dollar's already-solid gains. Weekly jobless claims and February business inventories were both in line with expectations. Market participants are now waiting to see if U.S. Treasury capital flow figures due Friday indicate that U.S. asset markets are attracting enough foreign interest to cover the U.S. trade deficit. Overnight, International Monetary Fund comments about U.S. growth outstripping that of its major competitors helped to lift the dollar. Some market watchers said that longer-term dollar bears are starting to buy back dollars, as they get nervous that the U.S. currency could continue to bust higher if the euro breaks through its 2005 low of $1.2733. That is the force behind the dollar's rise in recent days, even in the face of dollar-negative economic reports, said John McCarthy, director of foreign exchange at ING Barings Capital Markets. "It's a continuation of what we've been seeing over the last four, five, six days. A liquidation of medium-term short dollar positions," said McCarthy. -Steven Vames and Laurence Norman of Dow Jones Newswires contributed to this report. (END) Dow Jones Newswires 04-14-05 0958ET